JPMorgan Chase announced the tokenization of carbon emissions last month. This is an attempt to convert physical carbon emissions rights into digital tokens on-chain to address the fundamental problems of the existing carbon market using blockchain. In the carbon market, various registration entities have issued emissions rights in different ways, causing issues of inconsistent quality and inefficiency. With tokenization, it is expected that a common format will be created and emissions rights will be partitioned, allowing small and medium enterprises to purchase them, thereby improving liquidity.
Gold, wine, real estate, artwork, jewelry, and carbon emissions rights. There is nothing that cannot be tokenized in today's world. The era of tokenization is not a distant future. Tokenized assets allow for ownership to be expressed digitally and traded through blockchain technology, maximizing market efficiency, reducing transaction expenses, and improving accessibility in the global market.
Such changes provide investors with more choices and break down the borders of asset transactions, realizing a globalized digital economy. Investor demand is also high. Recently, the global virtual asset exchange Kraken met with the U.S. Securities and Exchange Commission (SEC) task force to discuss the tokenized stock system. The SEC is concerned that the rapidly growing tokenized stock market is not subject to regulations or constraints like the existing market and aims to enhance investor protection measures.
However, there is another important factor needed when buying and selling tokenized assets. It is a payment method for tokenized asset transactions. Since blockchain-based asset transactions occur digitally over the network, there are many cases where it is difficult to use fiat currency or physical money during the transaction process. What is needed at this time is a virtual asset "stablecoin" that fixes the value.
◇ Stablecoins with fixed value, on-chain payment methods
Due to the abundant liquidity and speculative nature of virtual assets that are traded 24/7, most of them are characterized by high volatility. Even virtual assets with a large market capitalization like Bitcoin and Ethereum experience significant price fluctuations, making them inconvenient as payment methods for asset transactions.
In contrast, stablecoins are designed to maintain a price equivalent to fiat currencies like the dollar or euro, allowing users to conduct transactions without worrying about price volatility when trading assets. Thanks to this stability, stablecoins play an important role not only in asset transactions but also in various financial services such as remittances, payments, and lending on the blockchain.
Recognized for such value, various stablecoins exist worldwide. PayPal's PayPal USD (PYUSD) is a stablecoin issued in collaboration with the blockchain company Paxos, used for remittances and payments within PayPal. Ripple, the issuer of XRP, which ranks third in market capitalization, also launched the stablecoin RLUSD, which is linked to the dollar at the end of last year. DAI, issued by a decentralized autonomous organization (DAO) called MakerDAO, is primarily used within the DeFi ecosystem.
Currently, the most widely used stablecoins are overwhelmingly dollar-based. Of the $250 billion in stablecoin market capitalization, 98% is accounted for by dollar stablecoins. Just as the dollar serves as the primary currency in international trade, most transactions in the virtual asset ecosystem are conducted based on dollar stablecoins. Specifically, the tether's USDT (about 62%) and Circle's USDC (about 26%), which are pegged 1:1 with the dollar, make up 90% of the stablecoin market.
◇ Dollar stablecoins as a means of expanding U.S. hegemony
Dollar-based stablecoins are interpreted not just as payment sovereignty but also as tools for geopolitical supremacy. The widespread usage of USDT and USDC globally is not simply because they were issued by Tether and Circle, but because they represent a "digital dollar." The U.S. government plans to maintain its hegemony in this new financial era represented by tokenization by leveraging dollar-based stablecoins.
Shortly after President Donald Trump took office in January and last month, the White House released two reports under the title "Strengthening U.S. Leadership in Digital Financial Technologies." Through the reports, the U.S. revealed a roadmap to foster the trading of all financial assets such as stocks, bonds, funds, commodities, and derivatives on the blockchain, just as Bitcoin and Ethereum are traded, with the means of transaction being dollar-based stablecoins.
The reason the U.S. government is supporting the spread of dollar-based stablecoins is that the issuance of stablecoins is closely tied to the demand for U.S. government bonds. Issuers of stablecoins like Tether and Circle hold or use U.S. government bonds as reserve assets for stablecoins. The spread of these stablecoins leads to increased demand for U.S. government bonds, allowing the U.S. government to further stimulate its bond market and enhance the stability of the financial system.
In other words, in the era of tokenization led by the U.S., more dollar stablecoins will be used, and the U.S. government can promote government bond demand through the expansion of dollar stablecoin demand, thereby strengthening dollar hegemony. This relationship plays a critical role in enhancing the international credibility of the U.S. dollar and maintaining the influence of the U.S. in the global financial market. Consequently, dollar-based stablecoins are particularly noted in countries where the value of the local currency is unstable, often replacing local currency in domestic markets.
Seo Byeong-yun, director of the DSRV Institute, noted, "In an era where purchasing tokenized stocks 24/7 with stablecoins has become a 'new normal,' we have moved from a time when we had to exchange won for dollars and pay fees to invest in U.S. stocks, and where we had to wait until night. In this process, stablecoins will inevitably grow in influence as payment methods, and the related industry is growing more rapidly in conjunction with the Trump administration's stablecoin fostering policies."